So, a schmuck in the audience tries to make the Krugman point, and cites Krugman as an authority. Hilarity ensues.

P-Kroog is a punch line, a clown. And it is not because he is dumb; far from it. He is completely unconstrained by facts or logic. I think P-Kroog actually believes he has evolved into pure energy, and need no longer worry about petty things.

John Taylor called Obama a big spender and unleashed the progressive chorus. Krugman (among others) went after him twice (see here and here).

Here's Taylor's graph (clic the pic for a more glorious image):

It's clearly true that spending automatically rises in (after?) a recession and that has something to do with the bulge around 2009.

But Taylor's beef with Obama is that spending never falls back down in the out years, even though growth is projected to be pretty robust.

Krugman sez that's just due to mandated spending increases and would have happened no matter what. But people, look at the CBO budget projections from 2007 shown in the graph below (clic the pic for a more glorious image):

They show spending out to 2017 at around 19% of GDP, and the trend, if anything is down.

All the automatic spending increase stuff Krugman talks about was known about when these projections were made, so I am not sure how it can be that Obama (and Pelosi and Reid) have / are not proposing a significant expansion of Federal spending!

We are talking about permanently raising Federal spending by 2-3 percentage points of GDP in ways that were not foreseen in 2007.

Abstract: This paper develops an economic analysis of the toilet seat etiquette. I investigate whether there is any efficiency justification for the presumption that men should leave the toilet seat down after use. I find that the down rule is inefficient unless there is a large asymmetry in the inconvenience costs of shifting the position of the toilet seat across genders. I show that the selfish or the status quo rule that leaves the toilet seat in the position used dominates the down rule in a wide range of parameter spaces including the case where the inconvenience costs are the same.

UNC Boss Holden Thorp is a friend of Bob's, so he's not taking cheap shots. He's just calling the corners.

Here is the hate crime report, on TV.

But it was a hoax. Just totally faked. HuffPo huffed and puffed about the "hate crime," but then when it turned out to be fake HuffPo actually had the gall to say "allegedly faked." You gotta like that: There WAS a hate crime, for sure, but then it was "allegedly faked." Why not "alleged hate crime" in the first place?

So, to review: this was TOTALLY made up, fabricated. And all the haters line up and say, "This fits the pattern. This proves my biases are correct. Only the government can solve this problem."

The truth is that the idea of a hate crime is idiotic. There are crimes. Prosecute them. But don't make stuff up. Or you give reasons to people who want to make stuff up just to get attention.

Assaults do happen. But stuff like this just makes it harder for the actual victims to get justice. And UNC Chancellor Holden Thorp should be ashamed.

Well in one sense, yes, he could always announce another policy initiative. QE III anyone?

But the important question is can the Fed do anything right now to reduce unemployment faster?

I don't think so.

All the policies Leonhardt mentions require the Fed to make a credible current commitment to an unusual set of future actions (set interest rates at near zero for several more years, create higher than "normal" future inflation).

In other words, for these types of polices to work, the Fed has to change expectations about future Fed behavior.

People, there is a huge literature exactly about the fact that the Fed cannot credibly commit to some future optimal policy (the so called "time-inconsistency" literature).

Fed promises to do strange things in the future simply are not believable and are thus extremely unlikely to produce the desired private sector reaction.

To my knowledge, none of the proposals being floated for the Fed to do more avoids this basic issue, and thus, I do not believe the Fed can do anything at this point to make unemployment fall appreciably faster.

The denunciation of Palin took place 45 years after William F. Buckley, Jr., wrote: "I should sooner live in a society governed by the first two thousand names in the Boston telephone directory than in a society governed by the two thousand faculty members of Harvard University." From Richard Nixon's invoking the "silent majority" to Palin's campaigning as a devout, plain-spoken hockey mom, conservatives have claimed that they share the common sense of the common man. Liberals—from Adlai Stevenson to Barack Obama to innumerable writers, artists, and academics—have often been willing foils in this drama, unable to stop themselves from disparaging the very people whose votes are indispensable to the liberal cause. The elephant-in-the-room irony is that the liberal cause is supposed to be about improving the prospects and economic security of ordinary Americans, whose beliefs and intelligence liberals so often enjoy deriding.

Tuesday, April 26, 2011

If it matters, Chez Mungowitz has gone over to cage-free eggs. Not expensive. Not sure they taste better, but for such a small price why not have more humane treatment. Angus is much closer to totally free range, because Chez Angus buys only free range chicken and beef. (Angus doesn't like seafood or pork) (Never mind; inside joke).

Of course, we also eat deer. Humanely killed deer, which means hunted by responsible expert marksmen. Happy, totally free range deer to dead deer in less than 10 seconds.

For my class this spring, the TW Smith Foundation was kind enough to provide generous support for some outside speakers.

With the permission of those speakers, I have created podcasts of their lectures to the class. Here they are. A note of warning: I did the recording and production. So the sound quality is something less than perfect, even though the speeches themselves were first rate.

So, took Angus to airport this morning, getting there at 6:30 am for his 7:30 am flight.

But, bad weather in Memphis, his connection. Came back to the Mungowitz ranch, for some nappies. Maybe second breakfast, some nice tea, and some WSJ reading on the front porch. Next flight out is at 12:30, through Detroit.

Angus, Mungowitz, Neanderbill, and the Lovely Ms. Neanderbill had the KPC summit dinner at a favorite local restaurant, Azitra.

We had lamb vindaloo, a variety of curry dishes, two orders of a great eggplant dish (bhartha), several great tandooris (tandoori salmon! Yumtown!), some really fine paneer in a creamy tomato sauce, a very fresh kachumber plate, and a giant rack of assorted nans. And...ate all of it. I did my best, but Neanderbill was the champ. He's 6'8", 185 lbs., and can eat more than ...well, more. We ordered an appetizer, a rack of bread, and seven entrees, and four of us left nothing behind but a vanished hunger.

We also had a bebida buena. They call it a "snake charmer," and it's tequila, lime juice, simple syrup, and quite a lot of fresh ginger. Kind of a margarita with ginger. Best margarita I have ever had.

And the restaurant was absolutely empty except for us. Strange. Really good food, clean pretty restaurant. A mystery.

But, in any case, the KPC summit was a success. Now I have to waddle back to the couch. Angus and I have us some NBA playoffs to be watching.

In December, Krugman and five other liberal economic thinkers (Joseph Stiglitz, Robert Reich, Jeffrey Sachs, Alan Blinder, and Larry Mishel) were invited to the Oval Office for a 90-minute off-the-record audience with the president. It was a month after the midterms, and many progressives were worried that even the modified liberalism of the administration’s first two years would dissolve in a new spirit of conciliation with the ascendant right. The economists present understood the meeting, one of them says, as the moment when Obama “talked to the left."

The economists sat ringing Obama: two Nobelists, a former Labor secretary, and a former vice-chairman of the Fed. Not a Gentile among them, Krugman noticed, but an amazingly high proportion of beards.You have the blueprint, people, what you do with it is up to you!

Sunday, April 24, 2011

I am heading to Mungotown to talk about monetary policy. I was researching the question of whether the Fed should target asset bubbles (and by target I mean, prevent / deflate!!). Chairman Ben's point of view is that the Fed should do so only to the extent that the bubble bleeds into overall inflation.

At this point something burbled up in my reptile brain; "housing is about 1/3 of the CPI, how could it have soared so far without bringing inflation along?"

People you probably know this already, but in 1983, the BLS redefined how to measure housing costs to "owner equivalent rent", and this variable didn't much move with housing prices in the last decade.